» Press Release 2012

Every Banking Innovation Has To Be Customer Centric and Responsive: Dr K C Chakrabarty, RBI

Standardization of devices and technology is a prerequisite in the banking industry

Customer protection should be the key. This warrants huge investments in IT security

“Focus of all innovation should be on the customer,” stressed Dr. KC Chakrabarty, Deputy Governor, Reserve Bank of India. Innovation should never be driven only by internal processes, systems or employees but customer satisfaction should be at the centre of all innovation he stated at the Confederation of Indian Industry’s (CII) 7th edition of the BANKing TECH Summit 2012 themed ‘Carving a New Path through Innovation.’

Dr Chakrabarty stressed that the main focus of banks should always be the customer. “Efficient technological innovation has helped in many ways like reducing transaction costs and making settlement system in stock markets efficient. Technology adoption further fuels creation of innovative technology. However it has to be customer centric and responsive. For technology and innovation to lead to better customer experience it has to be faster and hassle free, safer and error free and easier but cheaper,” he said.

Addressing the Banking Tech Summit, Mr Pratip Chaudhuri, Chairman, State Bank of India, said, “Technology has to work with the rest of the banking system to deliver its smooth functioning. It cannot become a substitute to people and practices but will have to learn to collaborate and work as a partner.” Talking about the current financial climate of the world, Mr Chaudhuri said, “The reaction to issues and problems should not be kneejerk. Solutions have to lie in the realms of practicality. It is important to have checks and balances that are judiciously placed in the system.”

A CII-PwC (PricewaterhouseCoopers) report titled ‘Carving a New Path through Innovation’ was also released by Deputy Governor of RBI and Chairman of SBI.

Stressing on customer focus, Dr Chakrabarty underlined the necessity of assuring customer protection in a technology led banking scenario. He opined, “Negligence of customer should be proved and the onus of proving must be with the bank”. He also brought home the point that neither technology nor business correspondence alone can generate business without the customer.

“Appropriate ecosystem needs to be created to promote and sustain technological innovation by leveraging the best available platform”, said Dr. Chakrabarty. This can be done by providing suitable cost effective technology and efficient multi-channel delivery model; standardisation of systems, customizing products and services while keeping in mind small and marginalised customers; efficient business models that are viable but not exploitative; data integrity with cost and speed; comprehensive MIS and by increasing information literacy for everyone while also making the quality of information better,” he said. He strove for standardization of technology when he said, “The most important prerequisite for any technology is standardization. Standardization of devices like ATM and even account numbers is very important.”

Countering the criticism levelled upon the regulatory body, Dr. Chakrabarty observed that, “There is a thin line of demarcation between what can be called an ‘innovation’ and a ‘violation’. Our job is to stop the latter.” He further viewed that we cannot go from a poor to a developed nation without technology and innovation but it is our job to reduce negative outcomes of technology and innovation while retaining benefits.

Mr N Chandrasekaran, Chief Executive Officer & Managing Director, TCS and Chairman, CII BANKing TECH Summit 2012, said, “Technology evolution has been very rapid and adoption of technology in the country has been spectacular. Yet we have to consider the sheer size, magnitude and complexity of the nation and its financial networks and remember that among other things, banking in the country is also about inclusion.” He viewed that the key challenges lie in using technology and innovation to bring new products and services that will bring out the evolving customer segments. He also stated that we have to leverage technology to drive cost efficiency to a level that can enhance profitability of the financial institution.

Talking about the CII – PWC report, Mr. Manoj K Kashyap, Executive Director, PricewaterhouseCoopers said, “Innovation across services, products, customer experiences and technology will prove critical in responding to the changing customer expectations and to create the agility needed to capitalise on opportunities. The three key themes that emerge from our report are customer centricity, innovation in service delivery models and the usage of emerging technologies. Innovations aligned to these themes willcreate a competitive advantage for banks, reduce cost and drive growth.”

Mr. Pradeep Bhargava, Chairman, CII Western Region said, “The challenge is to use human resources, technology and financial resources in an efficient manner.” He opined that customer aspirations are not only going high, but their behaviour is also changing and forcing the banking sector to go for the next level of technological advancement.Mumbai 28 June, 2012